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Piggybacking Your Way to Better Credit?

Piggybacking Your Way to Better Credit?



Estimated read time: 2-3 minutes

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Paul Nelson, KSL Newsradio A bad credit score can ruin your chances of getting a loan, and some analysts say it could take years to fix the problem. But more people are turning to methods that could boost a credit rating within a few months.

There are no shortages of companies willing to help you improve your credit for a major purchase. Likewise there are no shortages of ways around a low credit score. Some methods take longer to fix potential problems than others.

New Age Credit Owner Roi Ring says,"It takes a while for that to resolve itself, at least, if you listen to the credit bureaus. I think the credit bureaus do it, in some regards, for the reason that it benefits them."

One very fast method is growing in popularity, and it's being called "Piggybacking" by some groups. This is when a customer with a low score pays to become an authorized user of credit cards belonging to people with a very high score. The cardholders get some cash on the side, and the person with bad credit sees a higher score within 90 days. As for now, it's perfectly legal.

"There's nothing wrong with taking advantage of what the laws are, and as long as people are following the laws, then there's nothing actually wrong with what they're trying to do," says Ring. He says this isn't what he would do. He focuses on accuracy in credit reporting, and resolving disputes on a report. He says people should look out for credit repair companies that claim you can't fix low scores on your own. "That is a business that I would not do business with," he cautions.

According to the Associated Press, some people are using Internet sites like instantcreditbuilders.com to boost their scores and spending nearly $1,800 to do it. Some people in the mortgage industry say this practice is borderline unethical.

"That particular individual has not earned that credit history themselves. It's really not a fair assessment of what they're capable of doing," says Nations Mortgage Office Manager Steve Jones. He says if he were to hear of a customer doing this it would raise a big red flag. "On the lender level, they ought to disallow authorized users and this problem would go away," Jones says.

Officials from the National Association of Mortgage Brokers say "piggybacking" could be considered fraud, but federal officials have not outlawed the practice.

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